Beer Quality Report 2016

Beer Quality Report 2016 The profit opportunity in the draught beer category “With 50% of the beer we produce being drunk in pubs the partnership between the brewery and the pub is critical to ensure quality beer all the way to the bar. At a time of great excitement and interest in British beer we, along with our partners running pubs, must do all we can to share the knowledge on what makes great beer and make sure we deliver this time after time.” Alex Buchanan Export and Marketing Manager, Thornbridge Brewery 1 Welcome to the Beer Quality Report 4 Introduction 2 MARKET OVERVIEW 6 State Of The Market from CGA 3 Beer quality under threat 8 State of the Market from Vianet and Cask Marque 4 THE HOT ISSUE 13 Temperature 5 Quality over Quantity 15 Ranging 6 Go with the flows 17 Throughputs 7 Crossing the line 20 Beer Line Cleaning 8 DON’t LOSE YOUR SPARKLE 22 Glassware 9 YIELD: THE SILENT ENEMY 24 Yield 10 NOT EQUIPPED FOR QUALITY 26 Equipment Maintenance 11 Yielding success 30 Case Studies 12 about us 32 Company Insights 13 How Can WE HELP YOU? 34 WELCOME TO THE BEER QUALITY REPORT Welcome to the first Beer Quality Report – the definitive assessment of draught beer quality in the on-trade. QUALITY IS KEY Customers today are more demanding than ever when it comes to Consumers across the spectrum are demanding higher quality spending their leisure pound, with value for money topping the list of products, and nowhere is this more evident than in the beer sector requirements. where, as revealed in the recent Beer Quality Survey 2016 survey from Cask Marque, quality is at the top of the consumer agenda. While value is often thought to refer just to money, it is also about the quality of experience. This report brings together data from two organisations at the heart of quality in the beer sector – Vianet and Cask Marque – and In most pubs, beer represents over 70% of wet sales, but does the demonstrates that the delivery of consistent quality across the sector category get the attention it deserves to ensure that the offer exceeds is patchy at best, with individual licensees, pub owners and brewers customers’ expectations? The 2016 Cask Marque Beer Quality survey losing out, not only on brand equity, but also in terms of profit. The revealed that nearly 95% of customers would stop using a pub if the report conservatively estimates that this figure is in excess of £333 beer quality was poor, proving how important quality is to the market. million. This is the first of what will become an annual report on quality, Our CaskFinder app is used over 70,000 times a month by consumers combining Vianet’s ability to monitor quality remotely 24/7 365 days a looking to find Cask Marque pubs with an excellent beer offering, year with Cask Marque’s bi-annual visit data, which reviews the whole and it is clear from our research that quality directly affects sales and operation, from cellar to glass. It gives an interesting and stimulating margins. For example, Enterprise Inns’ pubs with Cask Marque quality break down across the key drivers of quality, raising a number or important questions for the industry. OUR CASKFINDER APP IS USED OVER 70,000 TIMES A MONTH accreditation grew beer sales by 4.4% last year over non-accredited pubs, with yields increasing by over 7%. The key element in delivering a quality product can be split between premise and practice. Premise is the cellar and equipment and practice is the staff knowledge. Both areas play a part in providing a quality beer offering and need investment. We believe this report highlights the key issues – how we are performing as a sector and the learnings we can gain to do things better and make our pubs more profitable. The report can also be used for benchmarking performance and for training purposes. Exciting times are ahead for both consumers and the pub industry, with a wider variety of beer styles being brewed and new, innovative “THE INDUSTRY COULD BE LOSING UP TO brewers continuing to emerge. We can make this momentum continue by focusing on improving the quality of beer available in our pubs, £333 MILLION OF PROFIT PER ANNUM ensuring that consumers experience the beer as the brewer intended. BEER QUALITY REPORT 2016 THROUGH POOR BEER QUALITY MANAGEMENT.” Paul Nunny, Director, Cask Marque 4 INTRODUCTION 1 THE ROLE OF TECHNOLOGY and insight IN DELIVERING QUALITY Technology has a profound impact upon all of our lives every day. It continues to provide us with new possibilities that we could not have envisaged five or ten years ago. This technology however has brought with it an information overload, leaving us with a lack of time to digest all of the facts and figures available to us. What really matters is that we use the insight that technology brings to make informed decisions that drive great results. We are proud to have worked with Cask Marque to produce this key report, providing insight into the opportunities that driving quality can bring to the draught beer category. This critical category has many innovative technologies available to it, helping brewers to make great beers and allowing operators to serve the perfect pint. The opportunity at the heart of these technologies is the ability to consistently deliver quality throughout the supply chain. The team at Vianet is passionate about great pubs and great beer. We have been working with our customers across the industry for many years, helping to drive quality and retail standards across the largest multiple operators through to independent sites. Day in, day out, we see the significant impact that effective management of these key areas has on pub customers in terms of great quality and improved profitability for the licensed retailer. Quality really does matter and our insight across the whole industry clearly shows that where great retail standards are being consistently delivered, profit growth follows. Quality matters for your customers and is critical in driving great returns for your business. Vianet has a long history of working with Cask Marque to bring its practical and impactful approach to quality management alive with Vianet’s real time draught quality and waste management solutions. We both look forward to sharing this insight across the industry to help bring great retail standards to the benefit of all. Steven Alton, Managing Director, Vianet Limited BEER QUALITY REPORT 2016 5 MARKET OVERVIEW The Move to Quality New on trade Graeme Loudon, commercial The new on trade is awash with breadth and quality, both in terms director at CGA Strategy, looks at of outlets and beer. We have seen the emergence of craft beer bars, the challenges and opportunities bringing a new spectrum of beer styles in both cask and keg format to a whole new consumer set. We have more breweries now than in the UK’s on trade beer market since the 1930s, and pockets of excellence are popping up not just in The on trade marketplace has been in a London but into new heartlands of Manchester, Yorkshire and beyond. huge state of flux over the past 10 years, our market has changed almost beyond With a higher focus on outlet quality, a demand for a premium World all recognition. Beer has emerged. World lager volumes have grown by 5.7% over the last year, outperforming the beer market which has seen volume fall Although the number of outlets in the on trade universe is flat year on by 3.6%. year, growing by 51 outlets to December 2015 (source CGA Outlet Index December 2015), we have seen 21,000 drinks led outlets shut The category has successfully transitioned from the fridge to the front their doors over the past decade – a difficult headwind for the beer bar and even now is offering growth through unpasteurised brewery market to navigate, and it has had to evolve. fresh tank beer. This has offered a point of difference in outlet, giving the consumer the wow factor. At its peak, pubs were closing at a net of 52 per week, and although this has slowed down to 27 per week, our traditional boozer and beer’s traditional home has many challenges remaining. When the dust settles on the MRO we may yet see more pubs go. Category MAT Volume Performance Categoryorce MAT Volume Brand ndex Performance to ec “Better quality outlets being here to stay means orce Brand ndex to ec there will be an on-going requirement for good quality beer to be served in the right way.” WORLD LAGER 5.7% WORLD LAGER 5.7% Over the same decade we have seen 8,600 food led outlets open their doors, driven in part, by a need to diversify post smoking ban, open new revenue streams through the recession and more recently by the casual dining boom. Beer doesn’t have as natural a fit in these new openings. Our analysis TOTAL BEER - 3.6% shows that beer accounted for 60% of the sales mix in the closed TOTAL BEER - 3.6% outlets, but is 40% of the sales mix in the openings, so beer needs to work harder in these new outlets to drive relevance and ultimately sales. This can be achieved through giving the customer a premium and new experience, stocking brands which will match well with food, and of -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 course serving the beer correctly to maximise the great flavour which -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 beer can deliver.

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